The growth and development of hair follicles is influenced by a number of different growth factors and cytokines, particularly members of the fibroblast growth factor (FGF) family. Keratinocyte growth factor (KGF or FGF-7) is a recently identified 28-kd member of the FGF family that induces proliferation of a wide variety of epithelial cells, including keratinocytes within the epidermis and dermal adnexa. Because KGF induces marked proliferation of keratinocytes, and both KGF and KGF receptor (KGFR) mRNA are expressed at high levels in skin, we sought to localize KGF and KGFR in skin by in situ hybridization. KGFR mRNA was relatively strongly expressed by keratinocytes in the basilar epidermis as well as throughout developing hair follicles of rat embryos and neonates. KGF mRNA was expressed at lower levels than was KGFR but could be localized to follicular dermal papillae in rat embryos and neonates. These results prompted us to investigate the effects of KGF on hair follicles in two distinct murine models of alopecia. In the first model, recombinant KGF (rKGF) induced dose-dependent hair growth over most of the body in nu/nu athymic nude mice when administered intraperitoneally or subcutaneously over 17 to 18 days. When administered subcutaneously, rKGF induced the most extensive hair growth at the sites of injection. Histologically, rKGF induced marked follicular and sebaceous gland hypertrophy, a normalization of the nu/nu follicular keratinization defect, and an increase in follicular keratinocyte proliferation as assessed by bromodeoxyuridine labeling. In the second model, a neonatal rat model of cytosine arabinoside chemotherapy-induced alopecia in which interleukin-1, epidermal growth factor, and acidic FGF have all demonstrated some degree of alopecia cytoprotection, rKGF induced a dose-dependent cytoprotective effect, abrogating as much as 50% of the alopecia in this model when administered beginning 1 day before the onset of chemotherapy. Taken together, these data suggest that KGF is an important endogenous mediator of normal hair follicle growth, development, and differentiation.